Don’t let high shipping prices catch you off guard! Learn what goes into price calculation and how you can get a good deal.
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What Variables Affect Shipping Rates?

Understanding the variables affecting different shipping rates can help you choose those parts of your parcel pricing contract that can save you money if negotiated effectively. As you prepare your next small parcel negotiation, keep these factors in mind:

1. Service levels
2. Shipment weight, shape, and size (dims)
3. Zonality
4. Fuel Surcharges
5. Accessorial Fees

1) Service Levels

Simply put, a service level refers to how quickly your package will ship and how much extra service or care you’re paying for. Depending on how important your shipment is, this charge could increase pretty quickly. Pay attention to how much priority shipping will cost you! It may not always be worth it, in many cases, the ground network can get to your inner zone almost as quickly. You should also be aware that the carriers can entice you with large discounts on service levels you don’t really use that often and sometimes your lowest discounts are in the service levels you use the most.

Pro Tip: If your business has an account with a parcel shipping service, you’re probably charged service fees for your package. Make sure to ask about this potential expense.

2) Shipment Weight, Shape, and Size

Weight is a standard consideration for shipping cost calculation. However, don’t forget that the size and shape of your package will influence your final cost as well! The bigger or more oddly shaped your shipment is, the fewer orders can be packed near it, and the less money the shipping service stands to make. Thus, you’ll often end up paying more. More importantly, you will be charged the greater of the two…actual weight vs. dim weight. The dim divisor that is utilized to calculate your dimensions is a negotiable item in your carrier contract and is often overlooked. Both FedEx and UPS also offer package optimization services in order to make sure you are maximizing the density of your shipments, there are also other independent 3rd Party package optimizations services providers in the market you can reach out to as well.  

3) Zoning Prices

Unfortunately, you’ll likely never come across a flat rate for shipping packages across the US. Though the exact borders may vary, most shipping services divide the country into zones. Your starting zone and the package’s destination will both factor into the ultimate price you’ll pay. Sending a package from the east to the west coast? Prepare for a relatively high shipping rate.

4) Fuel Surcharges

The most common surcharge you’ll encounter is a fuel surcharge. This one is pretty straightforward–it just covers the cost of the gas or jet fuel required to get your package to its destination. Just remember that as gas prices rise and fall this will affect your total shipping cost. FedEx and UPS both have their own fuel surcharges, for a larger shipper you may be able to negotiate a discount on your fuel surcharges as well. Also, your fuel is a percentage of the transportation rate and as you improve your discount here this will also lower the amount you pay in fuel surcharges.

5) Additional Shipping Fees

Depending on which service you use, you could have to pay between one to 80 different additional fees to ship your package. These costs may be negotiable and you should focus on the ones that have the greatest impact on overall carrier spend. Don’t let yourself get caught off guard with these additional costs, know those accessorial fees you are being charged for most frequently and work to negotiate some form of concession(s).

Saving Money on Parcel Shipping

When it comes to sending packages around the country, your options for saving money are somewhat limited. However, you can still take steps to reduce your costs. Keep the package weight low if you can help it, minimize your package size when you can, monitor price changes, and ask about potential discounts or unnecessary fees. If you monitor your package activity carefully, you can cut costs for your business.
Interested in learning more on parcel shipping rates? Join the conversation to see how other people save money on their shipping.

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LTL shipping is a great solution for any business trying to transport only a small amount of freight. But make sure you know how to prepare for anything that might go wrong.
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Potential Drawbacks

On the whole, LTL shipping is a dependable, cost-effective way to transport a small amount of cargo, most carriers maintain 97% or better on-time delivery rate. But business owners should be aware of both good and bad potential outcomes. Be prepared to deal with one of these issues when using LTL:

1. Losing the whole shipment
2. Higher risk of damage
3. Monetary drawbacks

1) Losing the Whole Shipment

One of the downfalls of shipping via an LTL carrier is that there is a possibility of the whole shipment not arriving at its destination on time or being lost in transit. As where, if shipped via a parcel CWT program you have a higher probability that most of your order will arrive in the published transit time.

However, an entire LTL shipment is contained in a single truck and rarely is a shipment broken down into a smaller quantity when capacity runs out for the entire order. Anything that delays or damages that single truck will also delay or damage your entire pallet of merchandise.

Pro Tip: Make sure to use a shipment manager or tracker to keep an eye on your LTL freight. This can reduce the risk of your goods being delayed in transit.

2) Higher Risk of Damage

In spite of the fact that there is less handling of the shipment, the risk of damage is actually higher with LTL providers. LTL carriers use forklifts to handle and load the freight, often double-stacking pallets in a trailer as well, making your shipment more susceptible to damage. Proper packaging and the appropriate use of dunnage, as well as blocking and bracing practices, are essential to guarantee a damage-free delivery.

3) Monetary Drawbacks

Lastly, LTL quantities don’t automatically contribute to parcel revenue-based incentives, only if you have negotiated this language into your parcel agreement. Unless your FedEx Freight or UPS Freight contract specifically states so, the revenue tendered to the LTL carrier will not contribute to the incentive received from the parcel carriers.

As well, there are so many more competitors in the industry that you may not even be transporting your LTL freight through the parcel carriers LTL business units. Though LTL shipping will generally save you money, don’t take it as a guarantee in every case. Use a rateshopper to double-check the price.

A Mostly Advantageous Strategy

Depending on your circumstances, the positives of LTL shipping may outweigh the negatives. But don’t make a decision either way without considering the advantages as well as the potential disadvantages. Make the best choice for your shipment and your needs.

Not sure if LTL is right for you? Connect with us for helpful ideas on when to use or pass on LTL shipping plans.

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Looking for a better way to send or receive small orders? LTL shipping may be the answer!
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Why Should You Choose LTL?

Less than truckload shipping can prove useful to any company that regularly ships or receives smaller orders. From keeping costs low to quicker transit times, LTL services can help improve your company’s business and success rates. More advantages of LTL include:

1. Reduced costs
2. Detailed tracking
3. Extra services available
4. Less environmental impact

1) Reduced Costs

Since you only need a portion of the truck space, LTL shipping rates are generally lower than paying for an entire vehicle. In many instances, LTL liability limits are much greater than FedEx and UPS CWT programs. Consider this a shipment weighing 350 pounds at freight class 50. One LTL carrier would limit liability to $700.00 ($2.00 per pound), whereas the parcel carriers would limit liability to $100.00 for the exact same shipment. Each LTL carrier has its own unique liability limits in regards to a loss or damage claim. Make sure to cross-examine your carrier’s rules tariff.

Additionally, remember that a company’s advertised prices may not be set in stone. Since the LTL marketplace offers a competitive landscape, with as many as 20-25 carriers for any given route, carriers are likely to be open to negotiating their costs. To find the best rates for your business, use an LTL rateshopper and save yourself some money.

2) Detailed Tracking

Even though your shipment shares space with other clients’ packages, LTL companies still make sure you can track your shipment and watch for a projected delivery date. Through the shipment reference number (pro#) and other information, you’ll be able to track your items at any time.

LTL shipping can also cut down on transit time, depending on the carrier. For instance, for a shipment from Houston, TX to Little Rock, AK, FedEx Ground has a published transit time of two days. Meanwhile, the LTL carrier Averitt Express offers a one-day transit. That extra day can make all the difference in a rush job!

Pro Tip: Business owners: Don’t overload your workload by handling all shipping functions in-house. A shipment manager can help you keep an eye on your orders!

3) Extra Services Available

LTL carriers pay close attention to your shipments and provide special services that shipping a full truckload wouldn’t allow. For instance, small orders can be delivered straight through your business’s front door as long as you’re present to receive them (inside delivery charge). There’s no way you could bring an entire truckload of goods inside! This just helps you get your supplies faster.

5) Less Environmental Impact

Taking advantage of an LTL shipping method lets the transport company use fewer trucks to transport their clients’ supplies, ultimately cutting down on the waste those trucks produce during a long drive. By shopping small and sharing the transport space, you can help contribute to a cleaner planet.

How Can LTL Carriers Help Your Business?

Of course, using LTL shipping doesn’t guarantee that all your business’s delivery woes will be resolved immediately. But if you need an effective method to keep your costs low and increase delivery speed, smaller shipments and specialized parcel carriers can certainly help.

Still want to learn more about LTL advantages? Join the conversation to see how this shipping method helps other business owners every day.

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Are you torn between freight shipping programs? Here’s what you need to know!
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What Are the Disadvantages of CWT Programs?

Whether you’re shipping small packages or a shipment weighing hundreds of pounds, you should be contemplating the shipping costs including fuel surcharges. You must also evaluate the technology for rating and routing, the loading or unloading dock (for large shipments), the staging area, and more.

1. Determining the Best Cost/Transit Time
2. Carrier Prices & Negotiation
3. Less Competition

1) Determining the Best Cost/Transit Route

One of the biggest hindrances of CWT programs is being able to decide the best cost/transit routing decision. It may require state-of-the-art software to compare CWT pricing and transit, not only in relation to CWT vs LTL but also CWT pricing in relation to your present parcel pricing program. In many cases, LTL transit time can not only compete with parcel CWT transit times, but they can also actually deliver your shipment quicker.

Pro Tip: Consider using modern programs to compare CWT pricing and transit.

2) Carrier Prices & Negotiation

If you’re not accustomed to CWT pricing and the various moving parts of how the rates are constructed, many shippers may feel at a disadvantage when shown pricing from the carrier. Like any transportation pricing, the majority of the elements are open to negotiation. Areas of negotiation would include the following: discounts, commodity tiers, minimum package charges, FSC differential, accessorials, etc. CWT pricing is just as negotiable as your regular parcel and LTL pricing.

3) Less Competition

Unless multi-sourcing your usual parcel business, it’s probable that the shipper only has one option for CWT pricing. Less competition is never great. While most shippers have multiple LTL carriers to choose from in relation to price and transit.

Conclusion

Shipping CWT has many pros, but like anything else, parcel hundredweight service also has a few cons. It’s necessary to weigh the pros and cons of both CWT and LTL shipments. We will be reviewing the pros and cons of LTL programs in the coming weeks. Check in for the latest article!

Interested in learning more about parcel hundredweight CWT programs? Join the conversation to speak with our logistics experts, today!

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It used to be pretty easy to choose between a small parcel and LTL. The old rule was anything over 150 pounds should be transported with an LTL carrier. However, many parcel shipping companies (like FedEx and UPS) have changed their dimensional and oversized package policies, that may warrant LTL as a cheaper alternative.

So, how then do you know when to use small parcel shipping or LTL? Consider the following.
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Weight & Shape

Obviously, the size and weight need to be a major consideration when selecting a small parcel or LTL carrier. You also want to think about the shape and size of your packages. Small parcel shipments are typically more automated than LTL. LTL carriers use forklifts to move packages while small parcel uses conveyor belts. Often times people prefer LTL when the packages are oddly shaped or over 150 lbs, because of the careful handling of your shipments.

The Final Destination & Transit Times

Something else that you should consider when choosing your parcel carrier is the final destination of your shipments. Is the shipment going to the 15th floor of a building? If so, small parcel will be the best avenue to take, as there will not be any inside delivery charges accessed. Is the address a residence? In this case both LTL and parcel carrier do charge for this service, however, the charges are much higher via LTL.

If shipping via a ground service on a parcel carrier, in some cases an LTL carrier will actually get it there quicker. A quick example would be from Houston, TX to Little Rock, AR: FedEx ground has a published transit of 2 days, while LTL carrier Averitt Express has a published transit of 1 day.  

Pro Tip: If your company is making top quality products, but the customer doesn’t receive the delivery in a timely manner or their shipment is damaged, it can negatively affect your business.

Price

The final consideration is the price. In most cases, your company will need to invest in software to simultaneously rate both modes of transportation and determine which route is the cheaper or effective option. Fuel surcharges alone could warrant the use of the parcel carrier, as their surcharges are dramatically cheaper than the fuel surcharges of LTL carriers. In an upcoming article, we will discuss the highly underutilized parcel Hundredweight and Multiweight programs of FedEx and UPS, as they can be an effective replacement for some of your LTL shipping needs.

So, Small Parcel or LTL Shipping?

After carefully considering the above, you should know which shipping service will be best for your deliveries. Are you interested in learning more about the benefits of LTL or parcel shipping? Join us on Facebook to speak with our shipping management team today.

The post Small Parcel Shipment Vs LTL: When to Use What appeared first on Freight Cowboy - Shipment Management.